Title: European Stock Futures Mixed; BOE in Spotlight After Fed Hike

Jun 16, 2022 01:57AM ET

By: AnalysisWatch

European stock markets are expected to open mixed on Thursday as investors take into account the latest significant interest rate hike by the Federal Reserve ahead of the Bank of England meeting.

At 2:00 p.m. EDT, the DAX futures contract in Germany was trading 0.4% higher; the CAC 40 futures contract in France was up 0.4%; and the FTSE 100 futures contract in the U.K. was down 0.9%.

On Wednesday, the U.S. central bank announced its biggest interest rate increase since 1994, raising the target federal funds rate by 75 basis points while pointing to further steady hikes this year.

Later on Thursday, the Bank of England holds its policy-setting meeting and is expected to raise interest rates by 25 basis points for the fifth straight meeting as it, like central banks around the world, tries to rein in soaring inflation.

However, there is some concern that the Bank of England will be tempted to follow the Fed's path and announce a more aggressive rate hike as inflation reached 9% in the 12 months to April, the highest level in 40 years.

Prices fell more than 2% overnight after the Federal Reserve raised interest rates, but overall market sentiment remains upbeat as global supply is constrained by sanctions on Russian oil, while demand in China, the world's largest importer, will recover from COVID restrictions.

U.S. crude inventories rose in the week to June 10, U.S. Energy Information Administration data showed on Wednesday, but gasoline stockpiles fell as demand from U.S. motorists remained strong despite record prices.

As of 2:00 p.m. EDT, US crude futures were 0.5 percent higher at $115.91 per barrel, while Brent futures were 0.3 percent higher at $118.91.

In addition, gold futures rose 0.8% to $1,833.65 per troy ounce, while EUR/USD traded 0.1% lower to $1.0432.